Author Topic: FIRE folks, did you talk to a Financial Advisor pre-FIRE?  (Read 2560 times)

alcon835

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FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« on: April 04, 2020, 03:53:03 PM »
I'm curious if anyone spoke to a traditional financial advisor about your retirement and FIRE plans before pulling the trigger. If so, what did they say? Where they against it? Did their math models agree with your analysis? Did any of their advice or attempts to get you to pivot to their system things you look back on and wish you had done?

What I'm getting at, for those of us working toward FIRE, is there a benefit in using a traditional financial advisor? Did they understand what you were trying to do and provide you helpful tools or were you disappointed with their outlook for you?

secondcor521

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #1 on: April 04, 2020, 04:00:42 PM »
I did not.  Like many FIRE folks, I don't thing traditional financial advisors are a good resource for potential FIREers.

What I did instead:

1.  I read a lot on FIRE forums and asked all my questions over the course of several years.

2.  I ran my numbers through as many FIRE calculators I could find.

3.  I wrote a detailed FIRE plan that covered all aspects of my FIRE.  This included asset allocation, cash flow, health care, kids' college expenses, tax considerations, Social Security, and contingency plans for what to do if my plan were to start failing.

4.  I asked FIRE people to review my plan from step 1 and incorporated any feedback from them.

I was a belts, suspenders, staples, and whatever else kind of planner.  I've been FIREd about four years now and my plans have been working out just fine.

LifePhaseTwo

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #2 on: April 04, 2020, 04:19:44 PM »
I did. I had done a ton of my own research, ran my numbers thru the FIRE calcs, and then decided to visit a financial advisor just to see what his take was. I chose one who was fee only, not selling anything, and specialized in retirement planning and post-retirement financial asset drawdown. His analysis results confirmed mine, which gave me that wee bit of extra comfort I was looking for, since I was tied in golden handcuffs and nervous about FIRE-ing.  Was it necessary? No. It was really just covering my bases. Itís been 17 months, and no regrets about pulling the trigger.

Loren Ver

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #3 on: April 04, 2020, 06:29:24 PM »
Early on the company I worked for let me go to one for free through our 401k company so DH and I did it.  It was, not too helpful.  He thought we were being very aggressive.  He too hoped to retire early (so at least I didn't have to explain the concept to him) just not as early as us. 

Basically it boiled down to the calculators couldn't handle our situation so he really couldn't give us any advice so he wished us luck. 

Then DH and I got really aggressive and cut a few more years off the timeline :D.

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jim555

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #4 on: April 04, 2020, 07:05:06 PM »
No, all self directed.  But I have experience in the financial industry.

reeshau

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #5 on: April 05, 2020, 03:19:16 AM »
I did approach a Certified Financial Planner (CFP) as part of preparing for my son's birth.  This happened to be 7 years from my planned FIRE date, and 5 years from the actual date.  Like @LifePhaseTwo 's experience, it was largely confirmatory, but did cover areas like insurance that I wasn't as confident in, as well as things I was pretty set on.

Also like LPT, I found a fee-only planner.  I used the Garrett Planning Network to find him; while all Garrett planners are fee-only, there are plenty that still want to run your money for a percentage.  So look for someone with a one-time or hourly fee.  My fee was $1,200; follow-up checks in following years are much cheaper, as the baseline research was done.  I did not make use of that, but it's something to think about, for possible assistance as you are actually starting out post-FIRE.

soccerluvof4

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #6 on: April 05, 2020, 03:55:23 AM »
I have no shame that I use a Vanguard adviser. The fee is minimal and I was very particular in selecting someone for me. Hes been very good at explaining options and consequences of what I want to do on both short term/long term and never has tried to sell me on anything. The only time too I have not gotten a hold of him is if it was a day he was not there and hes been there I believe 25 years. So its worked for me.

Fishindude

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #7 on: April 05, 2020, 08:37:30 AM »
I wouldn't suggest spending a bunch of money on it, but we talked to several financial advisers pre-fire.
You can generally pick up a little info from all of them you talk to.   Keep the ideas you like and throw out the rest.

John Galt incarnate!

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #8 on: April 05, 2020, 11:08:37 AM »
I've never hired or talked to a financial advisor.

My father is an investor and so is my aunt.

When I was ~12 they taught me the rudiments of   investing.

I majored in finance when I earned my B.S. in Business Administration.

I enjoy finance and investing so I used what I learned to achieve and maintain a secure FIREtirement.

Mr. Green

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #9 on: April 10, 2020, 02:52:06 PM »
We did just because I was curious what they would say. An aquaintance of ours worked at a brokerage/insurance company. I don't remember the name. Could have been Edward Jones or something similar. It was a free review and they billed as a check up, which they would no doubt be able to offer "improvements" for the average person. I gave them all of our financials, when we were planning to retire, and how much income we wanted to draw from investments.

Our acquaintance's boss talked to us as well, probably just to schmooze. He was incredulous at our plan but conceded that their models said it was sound. It was clear we had a good handle on what we were doing so they didn't try to pressure us into anything. It was cool to see their analytics confirm what we were confident would work.
« Last Edit: April 10, 2020, 02:55:21 PM by Mr. Green »

alcon835

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #10 on: April 11, 2020, 11:57:29 AM »
I really love these answers. What made me really curious was the Dr. Doom post from right before his retirement.

I think I like the idea of hearing that my financial plans are confirmed by a party that isn't part of the community and it sounds like most FIRE folks get that confirmation.

I'm still years away from FIRE, so this isn't really something I expect to do soon - and like many of you here I'd rather do my own research and pursue my own goals. But it's something that picks at the back of my mind, "What would they say to me? How would they look at what my family is doing financially?"

Greystache

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #11 on: April 12, 2020, 07:12:47 AM »
I took my plan to a financial adviser for a free review a few months before I retired. He review the numbers and said it looked like it had a good chance for success. The only thing he had an issue with was my planned annual budget of $60K.  Our household income at the time was a little more than $200K and he could not wrap his head around living that far below one's means.

ysette9

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #12 on: April 12, 2020, 08:53:06 AM »
I had a yearly free financial plan benefit with my old company with Vanguard, our 401k provider. I did that several months before FIREing and was pleasantly surprised at how solid she thought our position was. I was expecting hyper-conservatism. She had a few good suggestions that got us thinking but mostly was just a nice second set of eyes independently telling us that we were nuts.

HenryDavid

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #13 on: April 13, 2020, 09:19:41 AM »
Yes. Fee-only adviser. Not selling anything.
Word of mouth reference.
Worth it.

erutio

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #14 on: April 13, 2020, 09:30:56 AM »
I suppose since we are all on this forum already, one could just post a detailed case study before retiring. 

The pros are that it's free, and you would get hundreds of "financial advisors" to review your numbers for you.  You might even get a few actual CFPs. 

The cons would be like any niche online forum, you could get an echo chamber here. Although I do think people do a pretty good job of putting a critical eye on numbers that get posted here.

alcon835

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #15 on: April 13, 2020, 12:50:38 PM »
I suppose since we are all on this forum already, one could just post a detailed case study before retiring. 

The pros are that it's free, and you would get hundreds of "financial advisors" to review your numbers for you.  You might even get a few actual CFPs. 

The cons would be like any niche online forum, you could get an echo chamber here. Although I do think people do a pretty good job of putting a critical eye on numbers that get posted here.

That's definitely on my To-Do list for when I'm within a few years of FIRE.

spartana

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #16 on: April 14, 2020, 08:39:01 AM »
No. Just kind of winged the whole thing ;-). Well not really but had a very firm grasp of my spending and current/future expenses, the lifestyle I wanted in FIRE, and didn't see any reason I couldn't succeed. So far so good.

HotTubes

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #17 on: April 14, 2020, 08:46:07 AM »
I have access to a low-cost fee-only advisor through my employer.  They deal with the area's two largest employers and that's who my wife and I work for.

It's a lot easier to ask them how to deal with specific, localized questions than a forum.

So far, so good. 


Lews Therin

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #18 on: April 14, 2020, 09:24:30 AM »
I had free access to one due to being military in Canada.

The advisor had nothing new to tell me, and confirmed that the information on FIRE is correct.

He was impressed, but useless to me, since if you go through a lot of finance blogs, you have all the knowledge available.

And I retired Aug 2019, so i'm already down a ton, but still fine in my FiRE plan. If you do it right, you're financially bulletproof.

(Retired at 29, no pension, no magic money, simply saving a large portion of my salary)

Linea_Norway

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #19 on: April 15, 2020, 07:06:49 AM »
No. My biggest concern was the value of my own pension, which I cannot find on the website. For some reason my birth year has not yet been recalculated since the pension reform mamy years ago. But at my last job, they switched pension systems a year before I quit, which was also the reason I couldn't quit within the year without loosing the new pension again. We got offered a talk with a pension specialist for free. I told him about my plan and he thought it sounded interesting. He could give me a ballpark figure for my pension. I didn't show him all my calculations, because I don't think he was that kind of specialist.
I did discuss my excel sheets with my husband several times and eventually made a version he understood and agreed with. We didn't quit before also he was comfortable with the numbers.

peabody58

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #20 on: April 15, 2020, 07:34:44 PM »
A few years before FIRE, I enlisted the help of a Financial Planner.  I let him manage $100.000 and I did the same with another $100,000.  After 18 months I was way ahead of his returns by a good 15%, and I didn't have to pay any commissions.  I basically 'fired' him, took my money back, and completed my FIRE plans.  8 months later in 04/2015, I retired at 57 yo.  Our FIRE plans included taking SS at 62 (this year) and we are really enjoying the positive cash flow.  Our IRA and other investments have taken a slight hit with the Covid-19, but we don't need to tap those funds for a long long time.  IMO, one can do a whole lot better by investing in their own financial knowledge and setting realistic short and long term goals.  Being debt free and healthy also helps a lot.

alcon835

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #21 on: April 16, 2020, 06:56:10 AM »
A few years before FIRE, I enlisted the help of a Financial Planner.  I let him manage $100.000 and I did the same with another $100,000.  After 18 months I was way ahead of his returns by a good 15%, and I didn't have to pay any commissions.  I basically 'fired' him, took my money back, and completed my FIRE plans.  8 months later in 04/2015, I retired at 57 yo.  Our FIRE plans included taking SS at 62 (this year) and we are really enjoying the positive cash flow.  Our IRA and other investments have taken a slight hit with the Covid-19, but we don't need to tap those funds for a long long time.  IMO, one can do a whole lot better by investing in their own financial knowledge and setting realistic short and long term goals.  Being debt free and healthy also helps a lot.

That's really interesting. Did you blog/write about this anywhere? I'm also curious what the planner said when you showed him the difference?

peabody58

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #22 on: April 16, 2020, 07:32:10 AM »
No, I'm not into blogging.  I've shared my experience a few times hear and there on this and other sites, but not much detail.  The advisor basically said thank you for the opportunity to serve you and left it at that.  He knew he was on a trial basis and I simply severed our dealings without explaining to him any details other than I have chosen to go another path with my finances.  That other path included consolidating everything into Vanguard (IRA 60/40 Fund), taxable $$ 80/20 mix), creating cash flow (pensions, SS, Dividends/Cap Gains), eliminating debt, and living below our means.  Life is pretty good right now, just wish we could get out of the house and enjoy it more!

Car Jack

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #23 on: April 16, 2020, 09:20:15 AM »
I have not yet stopped working.  But with the stay at home orders, with a phone in my pocket, I'm practicing what I'll do when I do retire.  Well, without leaving my property. 

I'm an engineer and like anyone who thinks like an engineer, I figure ways to put cold hard numbers down to analyze things, allow for every known and then put in some margin because of unknowns.  I won't run my plan by any financial planner as the 3 I've interviewed over the years clearly flunked out of Clown School.  I have an excel spread sheet that covers all of my investments, costs, future RMDs, "times spending" if I were to live off assets now and some targets for liquid assets, the big one being $3MM.  I also document 25X spending (4%), 33X (3%) and 50X (2%).  I have a second spread sheet that covers income, tax, spending year by year until I'm gone.  This is mainly used to calculate what my wife will have left when I go.

At the point I decide to stop working, I'll either consult nobody or maybe run my stats over at Bogleheads.  My wife starts a full time job (she left the full time workforce in 1996) so benefits and income will be there.  And I've mentioned before, my plan is to have 50X spending when I stop working.  I like to be absolutely sure. 

On the investment side, as I'm so close to ending, I'm 50/50 stock/bond with a few hundred grand in US Savings bonds, paid house and 5 cars (2 driving kids) and about a year's spending in HYSA.  I chase low costs.  My average ER is 0.0154% ($397.43 on almost $2.6MM).

rmorris50

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #24 on: April 18, 2020, 02:26:26 PM »
My husband and I went to an advisor "early" in my career (age 30). My spouse hates dealing with money, and always just spent what he made, and kinda resented me for trying to get our finances melded and plan for the future. So our advisor really is more of a "money coach" and "money counselor", kinda like a fitness trainer. His investing has been pretty "ordinary" I guess, meaning anyone financially savvy could have done it on their own. He also made sure we had proper term and disability insurance. So for us it's been working since the money advise is coming from the advisor and not me :-)

However, our advisor is pretty conservative and thinks it's too risky for me to FIRE now. He works with pretty successful clients and is use to those people spending 80% of their pre-retirement income, so in his mind we need 4-5 million (we are currently worth 2.1m). We are in the process of moving to a lower COLA and reducing expenses, so maybe he'll come around once we complete that transition over the next year to two. He's also doesn't like to assume under 2.5% inflation on all expenses, and puts the fear in us about the health care wild card. While I appreciate he viewpoint, I also don't want be a wage slave forever just because of fear over healthcare cost in old age - in other words there's a balance.


smoghat

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Re: FIRE folks, did you talk to a Financial Advisor pre-FIRE?
« Reply #25 on: April 19, 2020, 02:22:14 PM »
I did. He looked at our assets and asked if I could live with 50k less a year since he thought that was what we needed to make FIRE work at our age. Since 50k is 1%, which by coincidence was his charged, I FIREíd him. Oh wait, I fired him. Weíve been fine ever since.

To be fair, I also interviewed four other advisors. They all have the same thing to say. US Large cap Equities, US Small cap equities, foreign equities, emerging markets, and bonds. The ratios varied, but they are the usual percentages that you can find on the Net. One even confided in me that the #1 thing advisors do is tell you is not to sell when all appears to be lost. I didnít sell when Trump was elected, even though he is the dumbest man in America. I continue not to sell now (minus a little to get through the next few months, albeit less than I normally would since Iíve reduced my spend a bit ...Iím just living luxuriously now, as opposed to in orgiastic decadence).

We have about the same that we had when we went into it as of Friday. Weíve also lived very well during the interim years, drawing down more than 4% in part because we have been renovating our house.

Iíve gotten rid of most of the low-rent interventions by the previous owner, I put in a new kitchen with a 29í Krion counter and itís looking just great now! With the virus dancing around us, everyone is walking on our suburban NJ street because itís so beautiful (itís one of the best in town, THE best if you want a modern house with lots of light and air) and only a complete lunatic will want to continue living in Brooklyn after so many weeks cooped up in their apartment (lyrics to the Big Black song Kerosone come to mind... Nothing to do, sit around at home/Sit around at home, stare at the walls/Stare at each other and wait till we die), so Iím pretty sure our investment has paid off handsomely.